Booking.com Partner Serko Gets Lift From Business Travel Recovery
Serko is reaping the rewards from a deal signed with the online agency just weeks before the pandemic hit, and now with “unmanaged travel” returning, the outlook has improved considerably.
A strategic partnership with Booking Holdings is helping expense management company Serko recover from the pandemic.
The New Zealand-based company upped up its revenue guidance for its 2023 fiscal year, which ends March 31, 2023, on Monday. It now expects total income of $29.6 million to $33.1 million, compared to $25.4 to $29 million.
The updated top estimate would be an increase of 149 percent on its total income for the 12 months to March 31, 2022.
The deal with Booking.com to power its new corporate travel platform was signed in November 2019, and has significantly contributed to its post-pandemic recovery. “We have seen stronger than expected revenue performance with solid trading results including our Booking.com for Business partnership,” said CEO Darrin Grafton.
As part of that landmark 2019 deal, Booking Holdings invested $11.2 million in Serko, taking a 4.7 percent “cornerstone stake.” It later recruited travel tech veteran Jonathan Starkings to head the partnership.
A new Booking.com for Business platform was launched by adopting Serko’s “next generation” booking and expense platform Zeno. The tool also includes features to manage food, drink, and entertainment, going beyond typical travel expenses and with a focus on the much obsessed about “connected trip” concept.
Zeno targets small and medium-sized businesses, although in May this year Serko joined forces with travel management company CWT to offer the platform as a “globally preferred travel booking tool” within its myCWT platform. In the same month it added Atlas Travel as a reseller partner for North America.
For the six months to 30 Sept. 2022 Serko saw a significant growth in Booking.com completed room nights, which grew 432 percent over a six-month period “reflecting ongoing progress within our unmanaged travel segment,” Grafton revealed in an earnings call on Nov 23. 2022.
Currently smaller businesses are widely regarded as driving the corporate travel recovery. Recent data from expense platform Embruse, for example, also shows business travel is coming back at volume. According to its latest quarterly SpendSmart Travel Trends report, the volume of international flights booked rose 998 percent in the fourth quarter of 2022 compared to the same period in 2021, and 73 percent on the 2022 third quarter.
“The data indicate a resurgence in in-person meetings despite less favorable weather and macroeconomic conditions, suggesting that employers continue to see the value in bringing people together,” said Emburse CEO Eric Friedrichsen.
Booking.com has also seen its bookings leapfrog year-over-year. A spokesperson for Booking said it doesn’t split out its corporate travel bookings, but based on whether users “self-disclose” their purpose as traveling for business, bookings represent 20 percent of total sales. However, the segment was recovering at slower pace than leisure bookings.
It’s not necessarily been an easy ride for Serko. In November 2021 it raised $60 million to further invest in its Booking.com for Business partnership. For the six months to Nov. 2022, Serko reported a net loss of $19 million.
Serko said its technology is used by 6,800 companies, who combined book $4.5 billion of travel a year through its platforms. As of May 2022 it employed 240 people.